Grains Mixed as CRB Index Makes Small Gains
Grains are mixed. SU is up 4 cents and near 8.96. CU is unchanged and near 3.31. WU is down 3 cents and near 5.31. US stocks are mixed to lower. US Dollar is mixed to lower. Crude is lower. Gold is higher. Virus still adding uncertainty to global economy. CEO of JP Morgan Chase said no one knows what is next for US economy. Last week CRB Commodity Index made small gains. Some feel Index is near a top with lower Q4 price action forecasted due to drop in global demand for raw material.
Chinese Ag futures (Sep) settled down 46 yuan, up 26 in Corn, up 9 in Soymeal, up 144 in Soyoil, and up 154 in Palm Oil. Malaysian palm oil prices were up 48 ringgit at 2,662 (basis October) at midsession, a 5 month high on supply concerns.
The US Midwest 6-10 day forecast for the Midwest sees the bulk of the rainfall activity to push back to the north and impact areas generally north of I-80. The 11-16 day outlook for the Midwest sees the ridging continuing for most of the period. Temps in the Midwest will run close to average for the week ahead, perhaps even a bit below the further north and west; the 6-10 day sees temps to run average to a bit above, but no severe heat. The 6-10 day forecast for the Delta sees light rains with coverage of around 50%.
Corn futures are awaiting more news on US 2020 crop size and when US farmers will sell. US corn export prices highest in World. China buying Brazil 20201 corn adds to confusion on their supplies. US summer weather is not perfect but enough to keeps prices from rallying. Some still feel final US corn yield could be between 179-184. Guesses for US 2020/21 corn carryout is 2,580 mil bu to 2,850 vs USDA 2,648.
Soybean supported by hope for China buying US soybeans. China bought a record 30 mmt of Brazil soybean May-July. Was this for needs or to add to reserves so they would not need to buy as much from US? China crush data suggest need has increased. Both China and Hong Kong report increase in virus cases. US and China relations are near all-time low. Bears doubt SX will trade much above 9.00. Guesses for US 2020/21 soybean carryout is 375 mil bu to 500 vs USDA 425.
Black Sea wheat futures have risen to 11 month highs. This due to slow farmer selling and talk of lower supplies. Russia export wheat prices ARE still lowest in World. Bears doubt WU will trade much above 5.60. . Guesses for US 2020/21 wheat carryout is 930 mil bu to 965 vs USDA 942.
On Friday Managed funds were net sellers of 1,000 contracts of SRW Wheat; net bought 9,000 Corn; bought 4,000 Soybeans; net sold 1,000 lots of soymeal, and; bought 4,000 Soyoil. We estimate Managed Money net short 5,000 contracts of SRW Wheat; short 110,000 Corn; net long 85,000 Soybeans; net short 30,000 lots of Soymeal, and; long 23,000 Soyoil.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.